Waukesha Sales & Services, Inc.

National Labor Relations Board - Board Decisions

May 31, 1962

137 N.L.R.B. 460 (N.L.R.B. 1962)

460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL jointly and severally with Shear's Pharmacy, Inc.,
make whole Frances Budnick for any loss of pay she may have
suffered as a result of the refusal to reinstate her.
RETAIL DRUG EMPLOYEES' UNION, LOCAL
1199 , RETAIL, WHOLESALE AND DEPART-
MENT STORE UNION, AFL-CIO,
Labor Organization.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
Employees may communicate directly with the Board's Regional
Office, 745 Fifth Avenue, New York 22, New York; Telephone Number
Plaza 1-5500, if they have any question concerning this notice or com-
pliance with its provisions.
Waukesha Sales & Service, Inc. and Lodge 1877, International
Association of Machinists , AFL-CIO. Case No. 16-CA-1-557.
May 31, 196
DECISION AND ORDER
On March 18, 1962, Trial Examiner Louis Libbin issued his Inter-
mediate Report in the above-entitled proceeding, finding that the
Respondent had engaged in certain unfair labor practices, and recom-
mending that it cease and desist therefrom and take certain affirmative
action as set forth in the Intermediate Report attached hereto. The
Trial Examiner also found that the Respondent had not engaged
in certain other unfair labor practices and recommended that
those allegations of the complaint be dismissed. Thereafter the Gen-
eral Counsel and the Respondent filed exceptions and supporting
briefs.
Pursuant to the provisions of Section 3(b) of the National Labor
Relations Act, the Board has delegated its powers in connection with
this case to a three-member panel [Members Leedom, Fanning, and
Brown].
The Board has reviewed the rulings of the Trial. Examiner made
at the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Inter-
mediate report, the exceptions and briefs, and the entire record in this
case, and hereby adopts the findings, conclusions, and recommendations
of the Trial Examiner, only to the extent consistent herewith.
1. We agree with the Trial Examiner, that for the reasons set forth
in the Intermediate Report, the Respondent has not engaged in unfair
137 NLRB No. 51.
WAUKESHA SALES & SERVICE, INC. 461
labor practices by its conduct on October 1, 1961, in unilaterally chang-
ing the method of computing overtime pay for its employees from a
daily to a weekly basis and eliminating double time payments for
Sunday work.
2. The Trial Examiner found that the Respondent violated Section
8(a) (1) and (5) of the Act by its conduct on October 24 and 26, 1961,
in refusing to comply with the Union's requests for a copy of Respond-
ent's profit and loss statement for the Odessa district in support of its
position that it could not continue the previous method of computing
overtime pay. We find merit in the Respondent's exceptions to this
finding.
It is the practice to allow the General Counsel considerable leeway
in amplifying or expanding certain details not specifically set forth
in the complaint if they accord with the general substance of the com-
plaint. As long as those details are fully litigated and offer no ele-
ment of surprise to the Respondent, they are usually held to be a proper
basis for an unfair labor practice finding. However, when the Gen-
eral Counsel attempts to prove, or the Trial Examiner makes a finding
of, an entirely new cause of action or violation not covered in the com-
plaint, the Board has rejected such offer of proof or findings.' It is
clear that these requirements were not satisfied in this case.
The complaint alleged a refusal to bargain only "in that Respondent
unilaterally changed its existing method of overtime pay of its em-
ployees." It was thus specific in alleging that this one act constituted
an unfair labor practice and was not couched in language reasonably
susceptible to the interpretation that any other incidents were separate,
additional violations. Particularly is this true with respect to the
Respondent's refusal to supply the information, inasmuch as it
occurred after the unilateral change became effective and cannot be
said to have been an integral part of the change itself.
Nor does the record support the Trial Examiner's conclusion that
the denial of the request was fully litigated. Rather, the record re-
veals that the evidence relating to the refusal was introduced solely as
background evidence to shed light on the Respondent's motives in
instituting the change in overtime pay and was so treated by the
Respondent. Hence, it was merely incidental to the issue concerning
the unilateral change in overtime. Furthermore, the General Counsel
failed during the hearing to clarify his position as including this inci-
(lent as an alleged unfair labor practice although given an opportunity
to do so, and the additional contention was made only in his brief to
t he Trial Examiner after the close of the hearing.
Under these circumstances, we must conclude that the question of
whether the Respondent's conduct in refusing to supply the informa-
3 Stokely-Van Camp , Inc., et at., 130 NLRB 869 , at 872-873.
462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tion requested by the Union constituted a violation of Section 8(a) (5)
and (1) of the Act was not properly before the Trial Examiner.2 We
shall therefore dismiss the complaint in its entirety.
[The Board dismissed the complaint.]
2 See Local Union No 41, Sheet Metal Worker8' Ae8oaiation, AFL-CIO, et at., 136 NLRB
853, Stokely-Van Camp, Inc, at at, supra, at pp. 873-874.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
Upon charges filed on October 11, 1961, by Lodge 1877, International Association
of Machinists, AFL-CIO, herein called the Union, the General Counsel, by the then
Regional Director for the Sixteenth Region (Fort Worth, Texas), issued his com-
plaint, dated, November 14, 1961, against Waukesha Sales & Service, Inc.,' herein
called the Respondent. With respect to the unfair labor practices, the complaint,
as amended at the hearing, alleges in substance that, (1) at all times material herein,
the Union has been the exclusive collective-bargaining representative of all the em-
ployees in a designated appropriate unit; (2) on or about September 24 and October 1,
1961, and at all times thereafter, Respondent refused and continues to refuse to bar-
gain collectively with the Union as such representative in that on the aforestated
dates it unilaterally changed its existing method of computing overtime pay of its
employees; and (3) by each of the foregoing acts Respondent engaged in unfair labor
practices within the meaning of Section 8(a)(5) and (1) and Section 2(6) and (7)
of the National Labor Relations Act, as amended, herein called the Act. In its duly
filed answer, as amended at the hearing, Respondent, in substance, admits the ex-
clusive collective-bargaining status of the Union in the alleged appropriate unit and
that it changed its previously existing method of computing overtime pay but denies
that it refused to bargain with the Union or that its conduct constituted an unfair
labor practice as alleged in the complaint.
Pursuant to due notice, a hearing was held before me on December 12, 1961, at
Odessa, Texas. All parties were represented and afforded full opportunity to be
heard, to examine and cross-examine witnesses, to introduce relevant evidence, to
present oral argument and to file briefs. On January 9, 1962, the General Counsel
and the Respondent filed briefs, which I have fully considered.
Upon the entire record in the case,2 and from my observation of the witnesses, I
make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Respondent, a Texas corporation with its principal office in Houston, Texas, main-
tains sales and service facilities in various cities in Texas, including a facility in
Odessa, which is the only one involved in this proceeding, as well as in other States,
where it is engaged in the business of sales and services of oilfield equipment. Dur-
ing the 12-month period preceding the issuance of the complaint, Respondent sold
goods and services from its various facilities in Texas, valued in excess of $50,000,
directly to customers located outside the State of Texas. During the same period,
Respondent's gross sales exceeded $500,000.
Upon the above admitted facts, I find that Respondent is engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The complaint alleges, the answer admits, the record shows, and I find , that Lodge
1877, International Association of Machinists , AFL-CIO, is a labor organization
within the meaning of Section 2(5) of the Act.
1 As amended at the hearing, without objection.
2I hereby note and correct the following obvious error in the typewritten transcript of
the testimony: On page 26. line 25, "we" is corrected to read "if he."
WAUKESHA SALES & SERVICE, INC . 463
III. THE UNFAIR LABOR PRACTICES
A. Introduction; the issues
As previously noted, Respondent is engaged in the sale and service of machinery
and equipment, and parts therefor, to customers engaged in the oilfield manufactur-
ing and construction industries. It has 13 district offices and facilities located in the
States of Texas, Louisiana, and New Mexico. Respondent has enjoyed peaceful and
friendly relations with the Union for a number of years. In addition to the Odessa
district involved in this proceeding, Respondent has had and continues to have
collective-bargaining contracts with other locals of this Union, covering the employees
in the Houston, Texas, and Shreveport, Louisiana, districts. There has never been
a strike at any of Respondent's districts and, although there have always been arbi-
tration clauses in the various contracts negotiated with the Union, there has never
been an arbitration case.
The Respondent and the Union had been operating since 1956 under several suc-
cessive collective-bargaining agreements covering the employees in the admitted ap-
propriate unit at the Odessa, Texas, facility. The last contract was to expire on
March 2, 1961. Negotiations for a new agrement commenced sometime prior thereto
and continued for sometime thereafter. Under the trems of the last agreement, as
well as all prior agreements, Respondent was paying the unit employees time and
one-half for all overtime in excess of 8 hours' work in any one day and for Saturday
and double time for Sunday. On September 20, 1961, Respondent informed the
Union by letter that "starting October 1, 1961, the practice of paying double time
and daily overtime will be discontinued in the Odessa Branch." The same day,
Respondent posted on its bulletin board a memorandum to its employees, advising
that "starting the pay period of October 1, 1961, double time and daily overtime will
be discontinued. ... " Beginning with October 1, 1961, Respondent eliminated the
payment of daily overtime and of double time altogether and paid time and one-half
overtime to its employees only after the first 40 hours of work in any 1 week. On
October 24 and 26, 1961, Respondent refused to comply with the Union's requests
that Respondent produce its profit and loss statement for the Odessa Branch in sup-
port of its position that it could not continue to pay daily overtime and double time
The sole issue litigated in this proceeding is whether Respondent's admitted conduct
in the foregoing respects, under the circumstances disclosed by the record, constitutes
a failure to bargain within the meaning of Section 8(a) (5) and (1) of the Act.
B. The appropriate unit; the Union's representative status therein
The complaint alleges, the answer admits, and I find, that all production and main-
tenance employees at the Respondent's Odessa, Texas, facility, including mechanics
and their helpers, radiator men and oprters, exclusive of all other employees, parts-
men, salesmen, office clerical employees, professional employees, guards, watchmen,
and all supervisors as defined in the Act constitute a unit appropriate for the purpose
of collective bargaining within the meaning of Section 9(b) of the Act.
Pursuant to a secret ballot election conducted by the Board on August 4, 1961, in
which a majority of the employees in the appropriate unit designated the Union as
their collective-bargaining representative, the Union was certified as the exclusive-
bargaining representative of the employees in said unit on August 14, 1961, as ad-
mitted in Respondent's answer. I find that at all times mentioned herein, the Union
has been, and is, the exclusive representative of all the employees in said unit for
the purposes of collective bargaining with respect to rates of pay, wages, hours of em-
ployment, and other terms and conditions of employment, within the meaning of
Section 9(a) of the Act.
C. Sequence of events
There is no serious dispute concerning the events involved in this proceeding.
1. Background
The last contract between the Union and Respondent, covering the Odessa em-
ployees, had an expiration date of March 2, 1961. As previously noted, this con-
tract, as did all previous contracts, provided for premium payment of time and one-
half for more than 8 hours' work in any 1 day and for Saturday, and double time for
Sunday. Section 15 permitted either party to reopen the contract on the question
of wages, holidays, and vacations upon 60 days' notice to the other party. Pursuant
464 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to this section, the Union gave notice on September 28, 1960, of its desire to reopen
the contract for wage negotiations. Such a meeting was held on November 21, 1960,
at which time the parties agreed to defer negotiations until February 27, 1961, in the
hope that "there might be an uptrend in business conditions."
In November 1960, Mr. Pearce, Respondent's president, telephoned to William
Jenkins, Respondent's manager of the divisions which included the Odessa district,
,and asked Jenkins if he thought Respondent could raise its rates to its customers and
if the oil industry was in a position to accept such an increase. Jenkins gave a
definite negative answer, expressing the view that Respondent would be committing
economic suicide because the drillers were in such bad shape. Pearce replied that
it was necessary for Respondent to reduce its expenses somewhere. At this time,
Respondent was absorbing the daily overtime and double time premium payments
to its employees, without charging these premiums to its customers. They discussed
the fact that Respondent's net profit had "just about disappeared." Shortly after
this telephone conversation, Pearce instructed Jenkins to stop paying daily overtime
and double time in the Hobbs, New Mexico, and Abilene and Odessa, Texas, districts.
Jenkins replied that this could be done in the Hobbs and Abilene districts but that it
would be impossible to discontinue such overtime premiums in the Odessa district
because Respondent was bound by the union contract to pay such permiums. Pearce
thereupon instructed Jenkins to write a letter to the Union, requesting that negotia-
tions be started on this subject matter. Pursuant to this instruction, Jenkins wrote
a letter, dated November 30, 1960, to Union Representative Ray, advising that since
the last meeting "financial reports of the Company have reached our desk which
makes it imperative we have another discussion regarding the payment of premium
time to employees of our shop," and suggesting December 12, 1960, as a convenient
and desirable date.
The parties met on the foregoing date. The Union was represented by Ray, its
Special Grand Lodge representative, and an employee shop committee; Respond-
ent was represented by Jenkins and Slay, district manager of the Odessa area.
Respondent's representatives presented Ray with a copy of a proposed contract which
contained a clause providing for the payment of overtime to the Odessa employees
only after 40 hours had been worked in any 1 week. Ray wanted time to examine
and study the proposed contract, and suggested that further meetings be deferred
until the completion of Respondent's contract negotiations for the Houston district.
The meeting thereupon adjourned.
Meanwhile, Respondent filed a representation petition with the Board's Regional
Office to determine whether the Union still represented a majority of the Odessa
employees, and a Board election was scheduled for August 4, 1961. Prior to the
election, Jenkins addressed the Odessa employees, describing Respondent's poor
economic condition and the depression existing in the domestic oil industry and
informing the employees that Respondent would have to discontinue the payment
of daily overtime and double time premiums "whether the Union won",the election
or "whether we [Respondent] won." On July 31, 1961, Respondent's President
Pearce sent a letter to each of the Odessa employees, advising them that "the manage-
ment and I have worked very hard this past year in eliminating the Union from our
Company," and urging them to vote against the Union in the election. The Union
won the election in the unit herein found appropriate, and on August 14 was again
certified as the exclusive collective-bargaining representative of all the employees in
said unit
2. Meeting of August 22, 1961
The first bargaining meeting after the election was held on August 22, 1961. At
this meeting, as well as at all subsequent meetings, the Union was represented by
Ray and the same employee committee The Respondent was represented at this
meeting by Division Manager Jenkins and District Manager Slay. The Union pre-
sented its contract proposal, which contained the same provisions as the expired con-
tract of March 2, with the following additions: (1) wage increases of about 20 cents
per hour; (2) show-up time; (3) an increase of 2 hours in callback time; (4) no
requirement for overtime work unless the employee was notified the previous night;
(5) Respondent required to furnish safety glasses made to fit each employee; and
(6) Respondent 'required to pay the full premium on the hospitalization policy when
employees were off sick due to nonoccupational accidents or illness. The proposed
contract continued to call for the payment of time and one-half for work performed
in excess of 8 hours in any I day and for Saturday and double time for Sunday.
Nothing was accomplished at this meeting because the parties could not agree on
the contract proposal to serve as the basis for negotiation; Ray insisted that the
Union's contract proposals be discussed, while Jenkins insisted that they discuss
WAUKESHA SALES & SERVICE, INC. 465
Respondent's contract proposal submitted the preceding December. As a result, no
bargaining was undertaken.
3. Meeting of August 30
Pursuant to Respondent's request, the parties met again on August 30. In addi-
tion to Jenkins 3 and Slay, Respondent was also represented by Service Manager
Jeffries. The parties reviewed the entire Union's proposed contract submitted at
the previous meeting, and agreement was reached on sections 1 and 9, the preamble
and payment for jury duty, respectively. With respect to the requirement for daily
overtime and double time in the Union's proposed contract, the Union and the
Respondent stated their respective positions for and against the elimination of these
premium payments. At this meeting, Respondent gave the Union its first contract
proposal since the election. This contract eliminated the payment of daily overtime
and double time and provided for the payment of the prevailing wages.
The meeting lasted almost all day and, before adjourning, the parties agreed to
meet again on September 6.
4. Meetings of September 6 and 7
Respondent's last contract proposals were reviewed at the meetings held on Septem-
ber 6 and 7, including the provision (article VI, section 5) wherein the Respondent
proposed to eliminate daily overtime and double time and to pay overtime only after
the first 40 hours' work in any 1 week. Service Manager Jeffries and District
Manager Slay were present as representatives for the Respondent at these and at all
subsequent meetings. During the meeting on September 6, agreement was reached
on numerous items in the Respondent's proposed contract, as appears from the
stipulation of the parties at the instant hearing.
The meeting of September 7 was of short duration and ended in the morning. At
this meeting, the Union's several counterproposals to Respondent's management-
rights proposal and no-strike proposal were rejected by Respondent on the asserted
grounds that they did not accord it sufficient leeway and protection. Before leaving,
Union Representative Ray asked if Respondent was in a position to give any wage
increase. Respondent's representatives replied in the negative. Ray admitted on
cross-examination that at this point "I said if the Company had nothing further to
offer that I thought that we was wasting time and I was going to call in the Concili-
ator to come in and see if we couldn't resolve our differences." Among their differ-
ences at that time admittedly were wages and the daily overtime and double-time
payments.
5. Events prior to the next meeting on September 29
On September 11, Ray wrote to the Federal Mediation and Conciliation Service,
requesting the intervention of the Service in the contract negotiations. Ray admitted
that he did not send a copy to Respondent.
By letter dated September 14, 1961, Service Manager Jeffries notified Union
Representative Ray that since Respondent had not heard from him in some time and
since it "cannot charge daily overtime or double time to its customers" in Odessa, it
"will in the very near future place into effect" its proposals of eliminating these
premium payments, emphasizing that the "company feels that it can't continue to
pay double time and daily overtime to its Odessa employees and still stay competi-
tive and retain our customers."
In a reply letter, dated September 16, Ray advised Jeffries that he had requested
the Conciliation Service to arrange a meeting, and suggested that Respondent not
make the overtime premium change in Odessa "until we have completed negotia-
tions and signed a new agreement, stating such changes as we may agree to."
By letter dated September 20, 1961, Jeffries advised Ray that "starting October 1,
1961, the practice of paying double time and daily overtime will be discontinued in
the Odessa Branch" because "the economic picture in the West Texas area was
such that we could not charge double time or daily overtime to the customers."
Jeffries also stated that "we, of course, will be glad to meet anytime with or without
a Federal Mediator."
About the same time, a memorandum to the Odessa employees, signed by Jeffries,
was placed on Respondent's Odessa bulletin board. This memorandum advised
the employees that "due to the fact that we could not charge the customers double
time and daily overtime," these benefits will be discontinued "starting the pay period
of October 1, 1961" and "employees will be paid time and one-half only after the
first 40 hours' work."
3 This was the last meeting attended by Jenkins.
64985C--63-vol. 137-31
466 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
By letter dated September 26, 1961 , Ray requested Jeffries not to make the pro-
posed change "without negatiating such changes with the Union ," and suggested
that if Respondent could not wait for the Conciliation Service that the parties meet
at Respondent 's convenience "to discuss further our proposal and any proposal
you may have to offer."
On September 28, 1961, Jeffries telephoned to Ray at a hotel in Amarillo, Texas,
and a meeting was ararnged for September 29. That same day, Jeffries wrote to
Ray, confirming the telephone arrangement for a meeting to be held on September
29, and stating the Respondent's position to be that the parties were at an impasse
concerning daily overtime and double time. The letter concluded with the follow-
ing paragraph:
Although we will continue to negotiate on them and other items, we cannot
continue to meet competition in Odessa by paying daily overtime and double
time. Therefore, we intend to discontinue these benefits beginning the pay-
roll period of October 1, 1961, as we indicated to you in our letter dated Sep-
tember 20, 1961.
6. Meeting of September 29
The negotiating meeting on September 29 lasted all day. This was the first meet-
ing attended by Respondent's Attorney Loeffler, in addition to Jeffries and Slay.
The provisions of Respondent's proposed contract on which agreement had not yet
been reached were fully discussed. The Union made several concessions and agree-
ment was reached that day on a number of other items, as appears from the stipula-
tion of the parties at the instant hearing.
The Union continued to ask for the wage increase included in its proposed con-
tract. The Respondent's proposed contract called for the prevailing rates. The
Respondent took the position that it could not give any wage increase because its
competitors were not paying any higher rate and also were not paying overtime.
The Union was still requesting daily overtime and double time. The Respondent
refused to change its proposal of paying overtime only after the first 40 hours of
work in any 1 week. The Union did not feel that it could go along with the Re-
spondent's proposal because, as Ray testified, "ever since we had an agreement
with this Company it had been overtime after eight hours, time and a half for
Saturday, and double time for Sunday." At one point, Service Manager Jeffries
stated that "we cannot afford to pay" daily overtime and double time. Attorney
Loeffler then interjected that "we won't say that. We'll say we will not pay it," and
gave as the reason that the customers (drillers) would not stand for the overtime
being charged to them and Respondent could not compete with its competitors if
it had to absorb the premium payments.
7. Meeting of September 30
The parties met again on the morning of September 30, with the same persons
representing each side. No further agreement was reached at this meeting. After
Respondent had rejected the Union's counterproposal to the grievance procedure,
Respondent's Attorney Loeffler started at the beginning of Respondent's proposed
contract and went through each item as to which no agreement had been reached
The parties stated their respective positions on each item. Respondent's attorney
stated that Respondent stood firm in its position on each unagreed item. Ray ad-
mitted that he said that the Union either stood firm in its position with respect to
each item or that it could not agree to the item. Ray asked if Respondent would
make any wage offer at all Ray testified that when Respondent replied in the
negative, he stated that in that case the Union did not care to change its position.
On cross-examination, Ray admitted that he said, "I personally, unless the employees
of the shop instructed me to, would never agree to cut the overtime off after 8 hours
or double time on Sunday." He further admitted that at no time did the Union
make any counterproposals with respect to wages or the oevrtime items. Jeffries
admitted on cross-examination that Attorney Loeffler took the position that Re-
spondent would not agree to any further changes in its proposed contract and
would insist on the inclusion of the items not yet agreed upon by the Union.
Before the meeting adjourned, Ray stated that he was calling on the Conciliation
Department for assistance in resolving their differences Loeffler replied that if the
Union had anything new to offer, Respondent would be willing to meet again, adding
that they were going to put the overtime change into effect on October 1. Ray
asked that no change be made until they had reached agreement or the Union would
have to file unfair labor practice charges.
WAUKESHA SALES & SERVICE, INC . 467
At the close of the meeting which was a short one, the parties had made no agree-
ment or arrangement for a further meeting.4
8. Events preceding the meeting on October 26
On October 1, 1961, Respondent eliminated the payment of daily overtime and
double time and paid its employees time and one-half only after the first 40 hours'
work in any 1 week.
On October 3 and 5, 1961, the Union by letters to Jeffries again protested Re-
spondent's change in regard to overtime payments. In the October 3 letter, Ray
disagreed with the Respondent's position that the parties were at an impasse and
stated that the Union was ready and willing to meet at any time. In the October 5
letter, Ray requested that Respondent have its books available at the scheduled
meeting with Conciliator Walter White on October 26, "showing the company's
profit and loss for District 7" [the Odessa district], in support of its position that
it "could not continue to pay daily overtime and double time."
On October 9, 1961, Walter White of the Federal Mediation and Conciliation
Service telephoned to Jeffries and advised that the Union had requested his services.
Jeffries agreed to meet with White and the Union on October 26.
By reply letter, dated October 24, 1961, Jeffries informed Ray that Respondent
felt that the Union had "no right to see our Odessa Branch's Profit & Loss State-
ment" because Respondent "has never stated or otherwise indicated to you in any
way that the Company was unable to pay daily overtime and double time or that the
Company could not afford to do so." Jeffries then listed the following reasons for
the discontinuance of daily overtime and double time. (1) The Company is unable
to charge its customers for such overtime premiums; (2) the Company's competition
does not pay their employees such overtime premiums; (3) the Company does not
pay such overtime premiums to any of its employees in the other shops in the area;
and (4) the Company feels that it cannot remain competitive and still pay its
Odessa employees such overtime premiums. The letter concluded with the statement
that "we will continue to negotiate on these and other matters with you even
though we appear to be at an impasse at this time."
9. Meeting of October 26, 1961
The parties met with Walter White of the Federal Mediation and Conciliation Serv-
ice on the morning of October 26. The Union and Respondent were represented by
the same personnel as were present at the last two meetings. Nothing was accom-
plished at this meeting, as the parties adhered to their respective positions.
At the outset of the meeting, White was given a copy of Respondent's proposed
contract, and both parties indicated to him the items on which they were in agree-
ment and the items on which they were in disagreement. After a review of the
contract, the Respondent's representative stated, according to Jeffries' testimony, that
Respondent was not going to change its position and that, unless the Union changed
its position, further meetings were probably useless. Ray testified that he stated
that the Union felt the Respondent should make some type of concession before the
Union made further concessions. During the course of the meeting, Ray asked for
a copy of Respondent's profit and loss statement for the Odessa district in connec-
tion with Respondent's position on overtime. Respondent's representatives refused,
stating that Respondent was not claiming financial inability to pay. After meeting
separately with each of the parties, Ray admitted that White announced that "it
looked like the parties were at a complete difference of opinion."
The meeting adjourned about noon, with White remarking that he would notify
the parties if another meeting could be held. No further meetings have been
called by the Federal Mediation and Conciliation Service, and the Union has made
no further effort to contact Respondent.
D. Concluding findings
The General Counsel contends in his brief that Respondent failed to bargain in
good faith within the meaning of Section 8(a)(5) and (1) of the Act in the two
following specific and independent respects: (1) the conduct on October 1, 1961, in
discontinuing the daily overtime and double time payments, without the Union's
consent; and (2) the conduct on October 24 and 26, 19611, in refusing to comply
4 The findings in this section are based on a composite of the mutually consistent testi-
mony of Union Representative Ray and Service Manager Jeffries. Loeffler did not testify.
468 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
with the Union 's requests for a copy of Respondent 's profit and loss statement for
the Odessa district in support of its position that it could not continue to pay daily
overtime and double time. The Respondent contends that, under the circumstances
disclosed by this record, its conduct in either respect was violative of the Act.
1. Respondent's conduct on October 1, 1961
The General Counsel contends that Respondent did not bargain in good faith on
the issue of discontinuing the payment of daily overtime and double time, that no
impasse had been reached either on this issue or on the other unresolved issues in
the proposed contract when Respondent put its new method of computing overtime
into effect on October 1, 1961, and that Respondent's real motive in discontinuing
the payment of daily overtime and double time, without the consent of the Union,
was to undermine the Union as the employees' collective-bargaining representative
and to avoid reaching an agreement. Respondent contends in its brief that it bar-
gained in good faith on this as well as on all other issues of the proposed contract,
that an impasse had been reached, and that, whether or not an impasse had been
reached, its conduct in putting its new method of computing overtime into effect on
October 1, 1961, without the consent of the Union, was not violative of the Act.
Without undertaking to determine how the negotiations and Respondent's conduct
specifically might be labeled, I am of the opinion that under the circumstances dis-
closed by this record Respondent's conduct did not contravene the statutory re-
quirement imposed upon Respondent by Section 8(a) (5) of the Act.
As early as December 1960, Respondent had informed the Union of the economic
situation which it felt required it to negotiate a change in the payment of daily
overtime and double time. Despite the fact that the contract obligating Respondent
to make such overtime payments expired on March 2, 1961, Respondent, neverthe-
less, thereafter continued the payment of daily overtime and double time for 7
months before finally discontinuing it. During that period, it gave several written
notices to the Union of its intentions in this respect and full opportunity to the
Union to negotiate in this regard as well as with respect to other items of a pro-
posed contract. Respondent at all times expressed its willingness to meet and ne-
gotiate with the Union. Six negotiating meetings for a proposed contract were
held in August and September 1961. During these negotiating sessions, each party
made proposals, counterproposals, and concessions; agreement was reached on a
very large number of items. At the last meeting on September 30, 1961, each
party admittedly adhered to their respective positions with respect to each item as
to which no agreement had been reached.
With respect to the overtime issue, Respondent explained the economic and busi-
ness reasons which it felt necessitated the discontinuance of such overtime premium
payments in the Odessa district. The Union's position admittedly was that it could
not agree to Respondent's proposed change because daily overtime and double time
payments had been in effect since 1956 when the Union and Respondent executed
their first collective-bargaining agreement. Union Representative Ray admitted that
he stated to Respondent's representatives that he, personally, "would never agree
to cut the overtime off after 8 hours or double time." Ray further admitted that
at no time did the Union make or offer to make any counterproposal in regard to
the overtime issue or with respect to the Union's wage demands which might have
an impact on the overtime issue. The employees were given advance notice and
explanation of Respondent's intended change in the method of computing overtime,
without in any way disparaging the Union or undermining the negotiations.
Considering the foregoing and the entire record as a whole in the light of the
long history of peaceful and friendly relations between Respondent and the Union, I
am convinced and find that by discontinuing the payment of daily overtime and
double time to the Odessa employees on October 1, 1961, without the consent of
the Union, Respondent did not violate Section 8(a)(5) and (1) of the Act.
2. Respondent's conduct on October 24 and 26, 1961
As previously found, by letter dated October 5. 1961. Union Representative Ray
requested Respondent to have its books available at the scheduled meeting with
Conciliator White on October 26, "showing the company's profit and loss for
District 7" [the Odessa district], in support of Respondent's position that "it could
not continue to pay daily overtime and double time." By reply letter, dated October
24, 1961, Respondent informed Ray that the Union had "no right to see our Odessa
Branch's Profit and Loss Statement" because Respondent "has never stated or
otherwise indicated to you in any way that the Company was unable to pay daily
overtime and double time or that the Company could not afford to do so." At the
WAUKESHA SALES & SERVICE, INC. 469
meeting with Conciliator White on October 26, 1961, Ray asked Respondent's rep-
resentatives for a copy of Respondent's profit and loss statement for the Odessa district
in connection with Respondent's position on overtime. Respondent's representatives
again refused, stating that Respondent was not claiming financial inability to pay.
Respondent has never at any time furnished the Union with any record information
or other probative material which would substantiate its position for discontinuing
the daily overtime and double time payments.
The General Counsel contends in his brief that Respondent's conduct in the fore-
going respects is violative of Section 8(a) (5) and (1) of the Act and urges the
Trial Examiner to make such findings. Conceding that the complaint does not
specifically allege an independent violation in this respect, the General Counsel
contends that the complaint is sufficiently broad to permit such a specific finding.
In support of his position, the General Counsel points out that the Union's request
was made for the purpose of evaluating Respondent's position as to the overtime
payments and its unilateral action in discontinuing such payments, and argues that
the Union's request was therefore "part and parcel" of the allegation in the com-
plaint that the "Respondent unilaterally changed its existing method of computing
overtime pay of its employees."
I note that the complaint alleges that Respondent refused to bargain collectively
with the Union, not only on October 1, 1961, but also "at all' times thereafter."
Although the only specific refusal alleged is the unilateral change of the existing
method of computing overtime pay, the complaint further alleged that Respondent
violated Section 8(a)(5) and (1) of the Act "by each of the foregoing Acts."
I am in agreement with the General Counsel that the conduct involved is sufficiently
related to the specific allegation and the complaint sufficiently broad to permit
finding to be made with respect thereto. In any event, as the details relating to
Respondent's conduct in this respect were fully litigated, without objection by
Respondent, and offered no element of surprise to Respondent, they may serve as
a proper basis for the findings hereinafter made.5 I now turn to a disposition of
the merits on this phase of the case.
Respondent's refusal to furnish the Union with the requested data was based on
the asserted ground that it was not claiming financial inability to pay daily overtime
and double time. This position is not borne out by the record.
Prior to October 1, 1961, Respondent had never charged the premium overtime
payments to its customers but had been absorbing them itself. It was Respondent's
President Pearce who ordered the discontinuance of daily overtime and double
time payments. Division Manager Jenkins admitted that Pearce told him it was
necessary for Respondent to reduce expenses because the volume of business had
fallen off and its net profit had "just about disappeared," and also that, since
Respondent could not pass the overtime premium rates on to its customers and still
remain competitive, Respondent would have to discontinue the practice of paying
daily overtime and double time as one of a number of economy moves. In his
letters, dated September 14, 20, 1961, Service Manager Jeffries informed Union
Representative Ray that Respondent would have to discontinue the practice of
paying its Odessa employees "these extremely burdensome overtime benefits" because
it could not charge these premium rates to its customers and still remain competi-
tive. In his letter of September 28, 1961, Jeffries informed Ray that "we cannot
continue to meet competition in Odessa by paying daily overtime and double
time." In his letter of October 24, 1961, in which he refused to furnish the data
requested by the Union and denied that Respondent had ever claimed that it was
unable or could not afford to continue to pay the overtime premium rates, Jeffries
listed four reasons for the discontinuance of the daily overtime and' double time
payments. In substance, these added up to the same reasons he had previously
given .6 At the hearing, Jeffries admitted that the Respondent could not operate
profitably on jobs where it paid its employees daily overtime and double time if it had
to absorb these payments itself, and that since it felt that Respondent could not
charge these premium payments to the customer and still remain competitive Re-
spondent took the position that the daily overtime and double time payments would
have to be eliminated.?
e New Enrydand Webb, Inc. et at., 135 NLRB 1019.
e One of the reasons listed for the first time was that Respondent does not pay such
overtime premiums to its employees in the other shops in the area. However, Jeffries
admitted at the hearing that the overtime premium rates were discontinued at Abilene,
Texas, only for a period of 30 to 60 days
7 Jeffries' further testimony that Respondent also considered the alleged resentment
which might-be caused among the Hobbs and Abilene employees where the overtime pre-
470 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
It does not follow that a claim of "inability to pay" The overtime premium rates
arises only when those specific words are used or when the continuance of such
payments would force Respondent into bankruptcy. Here, it is clear that Re-
spondent's position was that if it continued to pay the overtime premium rates
without passing them on to its customers, it could not operate at a profit and might
even operate at a loss; and if it did pass the premium rates on to its customers,
it could not compete with its competitors to obtain the work and consequently
would not make any profits. Thus, either way, Respondent's position was that
it could no longer afford to continue to pay the overtime premium rates, as Service
Manager Jeffries frankly admitted at the negotiating meeting of September 29 .8
Upon consideration of all the foregoing and the entire record as a whole, I
interpret and find Respondent's position to constitute a plea of "inability to pay"
the overtime premium rates, within the meaning of N.L.R.B. v. Truitt Mfg. Co.,
351 U.S. 149.9
Good-faith bargaining required Respondent, upon request, to submit information
about its financial status in support of its claimed inability to pay the overtime pre-
mium rates. For, as the Supreme Court has held in the Truitt case (351 U.S. at pp.
152-154), supra,
Good faith bargaining necessarily requires that claims made by either bargainer
should be honest claims. This is true about an asserted inability to pay an
increase in wages [the overtime premium rates, in the instant case]. If such
an argument is important enough to present in the give and take of bargaining,
it is important enough to require some sort of proof of its accuracy.
In the instant case, the requested information which was solely within Respondent's
knowledge, was necessary to enable the Union to determine whether Respondent's
asserted grounds for refusing to pay the overtime premium rates were legitimate or
just an alibi, as well as to enable it to make an informed report to its own members
as to the merits of the Union's demands. Union Representative Ray admitted
that at one of the bargaining meetings he stated that he would have receded from
his position in this respect if instructed to do so by the shop employees. On the
other hand, it is conceivable that the Union might have been able to persuade the
Respondent that the entire financial picture warranted some resumption of the over-
time premium rates, without passing them on to Respondent's customers. While
the Respondent's production of such data is no guarantee that the negotiations
would have led to agreement, it would at least have permitted further exploration
of one of the obstacles thereto. I therefore find that by refusing on October 24
and at the meeting with Conciliator White on October 26, 1961, to furnish to the
Union representatives such financial data or other probative material to substantiate
its claim of inability to pay overtime premium rates, Respondent violated its
statutory obligation to bargain with the Union within the meaning of Section
8(a)(5) and (1) of the Act.10
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring in con-
nection with the operations of the Respondent described in section 1, above, have
a close, intimate, and substantial relation to trade, traffic, and commerce among
mium rates had been discontinued , strikes me as unconvincing and as an afterthought.
He admitted that Respondent would not have changed its position even in the absence of
such assumed resentment, and also that in fact there was no such resentment when the
overtime premium rates were resumed at Abilene
8 Presumably recognizing the legal implications of this frank admission, Respondent's
Attorney Loeffler immediately interjected that "we won't say that We'll say we will not
pay it," and then gave the usual reasons
9 Tennessee Chair Company, Inc, 126 NLRB 1357, 1358 (where the Board held that
"we interpret the Respondent's position that it had not made any profits in 1958 to
justify any wage increase as constituting a plea of 'inability to pay' a wage increase within
the meaning of N L R B. v. Truitt) " ; Tennessee Coal & Iron Division, etc , 122 NLRB
1519, footnote 2 (where the Board made the same holding with respect to Respondent's
position in "asserting its inability to meet the Union's economic demands from the
operations of its zinc mine") ; and B. L Montague Company, 116 NLRB 554 (where the
Board made the same holding based on a variety of reasons advanced by Respondent for
refusing to grant a wage increase, one of which was that Respondent already paid wages
equal to or higher than its competitors and therefore it would be difficult for Respondent
to obtain profitable orders)
'° Truitt case and cases cited in footnote 9, supra
GILLETTE MOTOR TRANSPORT, INC. 471
the several States, and tend to lead to labor disputes burdening and obstructing
commerce and, the free flow of commerce.
V. THE REMEDY
Having found that the Respondent has engaged in, and is engaging in, unfair
labor practices , I will recommend that it cease and desist therefrom and take certain
affirmative action designed to effectuate the policies of the Act. In particular, I
will recommend that , upon request by the Union , negotiations between it and the
Respondent be renewed and that the Respondent furnish to the Union such record
information and other probative material as will substantiate the Respondent 's claim
of its inability to pay overtime premium rates and will enable the Union to dis-
charge its function as the statutory representative of the employees in the unit
herein found appropriate.
Upon the basis of the above findings of fact, and upon the entire record in the
case, I make the following:
CONCLUSIONS OF LAW
1. Lodge 1877 , International Association of Machinists , AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the Act.
2. The aforesaid labor organization at all times material herein has been, and
is, the duly designated exclusive bargaining representative of Respondent 's employees
for the purpose of collective bargaining within the meaning of Section 9 (a) of the
Act in the following appropriate unit:
All production and maintenance employees at Respondent 's Odessa, Texas, facility,
including mechanics and their helpers, radiator men and porters , exclusive of all
other employees , partsmen, salesmen , office clerical employees , professional em-
ployees, guards , watchmen , and all supervisors as defined in the Act.
3. By refusing on October 24 and 26 , 1961 , and at all times thereafter , to bargain
collectively with the Union as the exclusive representative of its employees in said
appropriate unit , the Respondent has engaged in, and is engaging in unfair labor
practices within the meaning of Section 8(a)(5) and ( 1) of the Act.
4. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
5. The Respondent has not engaged in unfair labor practices by its conduct on
October 1 , 1961 , in discontinuing the payment of daily overtime and double time,
without the consent of the Union.
[Recommendations omitted from publication.]
Gillette Motor Transport , Inc. and Office Employees Interna-
tional Union , Local 45, AFL-CIO, Petitioner. Case No. 16-RC-
2744. June 1, 1962
SUPPLEMENTAL DECISION AND ORDER CLARIFYING
CERTIFICATION OF REPRESENTATIVES
On July 19, 1961, following a Board-directed election, the Regional
Director certified the Petitioner as the collective-bargaining repre-
sentative of all office and clerical employees, with certain specified
exclusions, at the trucking operation of Gillette Motor Transport,
Inc.,' hereinafter called Gillette, at Dallas, Texas. Thereafter, on or
about December 1, 1961, the Petitioner filed a motion for clarification,
requesting in effect that a group of approximately nine employees be
included in the appropriate unit, although they are nominally em-
' Although this corporation was occasionally referred to in this proceeding as Western
Gillette Motor Transport , Inc, the above is its correct name.
137 NLRB No. 58.